Today, collaborative consumption startups that let people rent or “share” their assets–from couture and cars to lodging and limos–are facing mature business problems. In the category, Airbnb, Uber, Lyft and Sidecar, RelayRides and several others have drawn scrutiny from regulators and insurers, as well as competition from giant corporations in the U.S.

Yet, investors’ and entrepreneurs’ interest in creating these businesses remains high. April saw investments in new concepts in the category such as PivotDesk, which helps people rent out their unused office space by the month, and Science Exchange, for scientific research and lab equipment.

Social Bicycles

In the latest deal, Social Bicycles raised $1.1 million in seed funding from David S. Rose, SOS Ventures, Esther Dyson and Karl Ulrich, according to the company’s Chief Executive Ryan Rzepecki. The startup enables Zipcar-like rentals of the bikes it designs and manufactures.

Instead of renting bikes by the day, picking them up and returning them to a storefront, renters access “SoBi” bikes on a self-serve basis, picking them up, and parking them at their destination of choice.

Social Bicycles’ offering differs significantly from a recently debuted bike sharing effort in New York, operated by NYC Bike Share and sponsored by Citigroup: Citi Bike. That program set up hundreds of bike kiosks across Manhattan and Brooklyn, and asks riders to pick up and drop off bikes only from those docking stations. The Citi Bike program also requires users to buy a 24-hour minimum pass.

The Social Bicycles–instead of locking into a docking station–include a digital locking system, which is integrated into the bike frame. Along with the bike’s lights, the locking system runs on solar and wheel-generated power. Users enter an account number into the system’s keypad to start the billing process and unlock the bike. When they lock the bike back up, the system knows the billable time is over.

The Social Bicycles approach would be well-suited for a quick trip across town, instead of a full week of touring, says Rzepecki. He’s hoping to not just delight riders, but also make a positive impact on air quality wherever Social Bicycles become available, by getting people out of the habit of taking short trips in taxis or cars when they are able to bike.

Lora Kolodny

From left to right: Mark Miretsky, Justin Wiley and Chief Executive Ryan Rzepecki of Social Bicycles Inc.

Currently, Social Bicycles has five full-time employees and a small office in the Lower East Side neighborhood of Manhattan. Earlier, the company spent six months at the BMW i Incubator in New York. BMW i Ventures has not made an investment in the company–so far.

According to Rzepecki, his company plans to use the seed money to manufacture more of its proprietary aluminum bicycles and locking systems. The company deploys its bikes to cities, businesses and college campuses, which either rent the bikes out, or offer them to employees and students as perks and a healthy way to get around.

Social Bicycles has already manufactured and distributed 175 bikes to customers to date.

Its current clients are varied. One is a long-time for-profit bike-rental business in Florida called CycleHop which has ordered 300 bikes. Another is a nonprofit car-sharing program in Buffalo, N.Y., that now also offers bike sharing. Perhaps most interestingly, the San Francisco Airport bought 40 Social Bicycles for its employees to use to get around airport property without burning any fuel.

Social Bicycles rewards users with discounts or credits when they park their bikes back at a predetermined “hub.” The hubs have signage and distinct bike racks.

Social Bicycles believes its bike-sharing systems can prove a break-even or better public-transit option for municipalities around the U.S. Believe it or not, Rzepecki said, “fare-box recovery,” or money from paying commuters, doesn’t cover the costs of traditional public transportation, like buses or shuttles, offered in most U.S. cities.

Social Bicycles

David S. Rose, the founder of Gust.com, and a long-time New York angel investor observed that, “Social Bicycles is bringing all the advantages of the digital, cloud-based world to the real, physical world, and providing a boost to what is already a rapidly growing alternative transportation industry. The first time I saw Ryan present the company…I was so excited I nearly jumped out of my seat.”

The investor believes the company is already proving its worth, having won several contracts for bike-sharing systems around the country.

After ensuring a long-term supply of its bicycles, he said the startup’s seed funding should be used to implement initial client projects, and to improve the company’s website for both bike renters (or end users) and clients who run bike-sharing programs for profit or for good via SocialBicycles.com.

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